Wells Fargo & Company (WFC)
Q1 2010 Earnings Call Transcript
April 21, 2010 9:30 am ET
Bob Strickland – Director, IR
John Stumpf – Chairman, President and CEO
Howard Atkins – SVP and CFO
John Mcdonald – Sanford Bernstein
Matthew O'Connor – Deutsche Bank
Chris Kotowski – Oppenheimer
Betsy Graseck – Morgan Stanley
Chris Mutascio – Stifel Nicolaus
Nancy Bush – NAB Research
Joe Morford – RBC Capital Markets
Moshe Orenbuch – Credit Suisse
Previous Statements by WFC
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Good morning. Thank you for joining our call today during which our Chairman and CEO, John Stumpf; and CFO, Howard Atkins will review first quarter 2010 results and answer your questions.
Before we get started, I would like to remind you that our first quarter earnings release and quarterly supplements are available on our Website. I’d also like to caution you that we may make forward-looking statements during today’s call and that those forward-looking statements are subject to risks and uncertainties.
Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings, including the Form 8-K filed today and the earnings release and quarterly supplement included as exhibits. In addition, some of the discussion today about the company’s performance will include references to non-GAAP financial measures. Information about those measures, including a reconciliation of those measures to GAAP measures, can be found in our SEC filings and in the earnings release and quarterly supplement available on our Website at wellsfargo.com.
I will now turn the call over to our Chairman and CEO, John Stumpf.
Thanks Bob and thanks to everyone who has joined us on this call. We appreciate your interest in Wells Fargo. Before I turn this over to Howard Atkins for a more in-depth review of our results this quarter, let me review some highlights from the quarter and why I am excited about how Wells Fargo is positioned for the future.
Our first quarter results reflect underlying strength, with revenue growth that demonstrates the power of our diversified business model and combined franchise. In fact, during the challenging economic environment of the past couple of years, which continues to affect employment, housing values, loan demand and interest rates, we have been afforded a great opportunity to clearly demonstrate how well our business model works for our customers and for shareholders, not matter what the economic conditions are.
This wasn’t by chance, but reflects the benefit of our longstanding focus on diversification. Our team has continued to meet our customers’ financial needs, while pulling together to make our merger with Wachovia, the largest in US banking history a success. Over the past year, we have completed a tremendous amount of work behind the scenes, choosing and enhancing systems and products, aligning jobs and completing detailed integration plans. So, we are now well prepared for the more visible work you will see happening this year and next.
Today, we have converted a number of business lines including mortgage and credit card and four of our overlapping banking states, and we are preparing to complete the California conversion this weekend. Texas, our last overlapping state would be converted in July. Our eastern states would be converting in the third quarter and we are on schedule to complete all conversions by the end of 2011 as we have planned.
This merger has been a team effort and our entire team is working exceptionally well together. Culturally and financially, this merger is exceeding my expectations and I couldn’t be more excited about the opportunities ahead. At this point, we believe we have turned the corner on many of the credit challenges of the past two years. Throughout this economic downturn, we have continued to lend to our customers, but customer demand and therefore earnings asset growth remains soft. Against this backdrop, it’s important to note that we remain firmly committed to our discipline in managing credit risks and interest rate risks and to managing our company for long-term earnings growth, not short-term quarterly results.
In short, we believe we have had demonstrable success throughout these tough economic times and we positioned our franchise well for better economic times ahead. We have held on to customers by providing a full spectrum of products and services to meet their needs throughout this period. We have dominant market positions in consumer, commercial, retail brokerage and other key business areas. We have a tremendous nationwide distribution network. In other words, Wells Fargo has proven to have the right business model and it’s right where it needs to be to be successful going forward.
In our view, while the US economy is gradually regaining its footing, it has yet to deliver a broad base recovery for our country and for many of our customers. Though the signs of strength we are seeing in the economy are encouraging, we are not counting on them alone to deliver the performance you come to expect from Wells Fargo. I am confident our company will continue to find and leverage opportunities that are unique to our diversified business model, our valued customer relationships and our disciplined approach to managing our balance sheet.
Now, let me turn this over to Howard Atkins, our Chief Financial Officer.
Thank you John. My remarks will follow the presentation that’s included in the first quarter quarterly supplement that’s available on the Wells Fargo Investor Relations Website, and I am going to focus in on first quarter earnings, capital and credit.